Annual General Meeting
The annual meeting where shareholders formally approve the directors' actions on their behalf during the past financial year and adopt the Annual Report and Accounts. It is also the meeting at which Directors generally retire and are formally appointed.
Bid Price
The price in the market which a prospective buyer is prepared to pay (BID) to acquire the share. The lower value of the prices in the Bid to Offer spread. The price received when the shares are sold.
Brokers Forecast
Brokers estimate the future performance of a company usually based on key indicators: Pre-tax profit, EPS and DPS. Two future year estimates are shown for each company (the current and next financial period). These figures are used to calculate the forecast consensus of all brokers for an individual company.
Close period
The period, generally of two months, prior to the company's release of its Interim or Preliminary results, when the directors are not permitted to trade in the shares of the company.
Company
The separate legal entity in which an investor is able to acquire a share stake, representing his part ownership of a business.
Corporate Governance
A generic term which describes the ways in which rights and responsibilities are shared between the various corporate participants, especially the management and the shareholders.
Dividend
The payment by the company to its shareholders during the financial period. Usually paid as an Interim Dividend at mid year and a Final Dividend once the final business accounts are prepared and the results known.
Earnings
The profit earned by the company during the financial period. Usually expressed on a per share basis as Earnings per Share (or EPS) and used as the key element of the Price Earnings Ratio (or PER or P/E Ratio) in judging comparative values.
EGM
Extraordinary General Meeting. A meeting of shareholders to discuss and approve special matters proposed by the directors, such as approval of a take-over, or major acquisition.
Equity
The voting capital in the company, represented by the ordinary shares.
EX
Used to indicate that the share is currently available in the market with a lack of certain specific rights and conditions. This might be ex dividend (or XD) where a purchaser is not entitled to the next declared dividend, or ex rights (or XR) where the holder is not able to participate in a proposed new share issue by the company to existing holders on preferential terms. Also see CUM.
Final Results
The announcement and publication of the company's financial results for its latest business period, or financial year, in the form of the Annual Report and Accounts.
Fund Manager
A professional investor, typically in an insurance company, pension fund, investment and unit trust.
Institutional Investor
Entity with large amounts to invest, such as Investment and Unit Trusts, Insurance companies, Pension Funds, Investment Banks and Endowment Funds. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. They account for a majority of overall volume traded and the value of shares held.
Interim
The results covering part of the company's financial year, usually the first six months, and the dividend paid to shareholders out of the profits, or earnings, of that period.
Investor Relations
A department within a public company that distributes information about the company and its financial performance to existing and potential shareholders.
Market Capital
The total Stock Market value of the company's shares, being the total number of shares issued to shareholders multiplied by the current share price.
Market Price
The price at which the share can currently be traded in the market.
Merger
The arrangement by which two companies unite without one attaining direct control over the other.
Mid Price
The normal price quoted in the press for the company's shares, being the mid point in the Bid and Offer spread.
Ordinary Share
The main class of share capital representing the owners interest in the company.
Price Earnings Ratio
This expresses the current share price (P) as a multiple of the earnings per share (E). The P/E ratio is used as a measure of how much the investor is being asked to pay for the investment. It is a means of assessing both the value of the company and also its comparative value and attraction compared to other companies.
Private Investor
An individual who purchases securities for him/herself, as opposed to an institutional investor. Also called individual, small investor or retail investor.
Share
Representing one unit of ownership in a company.
Share Certificate
The document that records the shareholder's stake in the company. An indication of ownership to be returned on the sale of the holding.
Shareholder
A person, institution or company who owns shares in a company or mutual fund. For company shareholders along with the ownership come a right to dividends and the right to vote on certain company matters, including the board of directors. Also called stockholder.
Spread
The difference between the Bid and Offer prices.
Stock
An instrument that signifies an ownership position, or equity, in a corporation, and represents a claim on its proportionate share in the corporation's assets and profits. Also called equities or equity securities or corporate stock. See also share.
Stock Exchange
A Market on which shares or other securities are bought and sold. Examples include the London Stock Exchange (or LSE) and AIM.
Stockholder
Taking the traditional definition, stockholders are lenders and are accounted among the company's creditors. Interest on stocks must be paid ahead of any dividend to shareholders. Share or equity capital is money permanently supplied in exchange for a stake in the ownership of the business. See also shareholder.
Take-over
When one company approaches another company, making an offer to the latter's shareholders, seeking to acquire their shares in sufficient quantities to take control. If the company that is being taken over is listed on the Stock Exchange, a strict protocol of rules and regulations exist to protect the interests of shareholders. A time limit is set for acceptance of the offer. If the company making the offer gets control of 90% or more of the shares, it has a legal right to acquire the remaining 10% of the shares at the offer price. A take-over bid may be friendly, recommended by the board of the company being taken over, or it may be hostile, rejected by the board with the company making the offer going direct to shareholders.